4-1 Sole Proprietorships

Compare the advantages and disadvantages of sole proprietorships.

Sole proprietorship

One person owns and manage a business

Partnership

A legal form of business with two or more owners.

Corporation

A legal entity with authority to act and have liability separate from its owners.

General Partnership

A partnership in which all owners share in operating the business and in assuming liability for the business’s debts.

General Partner

An owner (partner) who has unlimited liability and is active in managing the firm.

Limited Partnership

A partnership with one or more general partners and one or more limited partners.

Limited Partner

The responsibility of a business’s owners for losses only up to the amount they invest; limited partners and shareholders have limited liability.

Limited liability

The responsibility of a business’s owners for losses only up to the amount they invest; limited partners and shareholders have limited liability.